DoD's $430M Lockheed Martin Contract for Aircraft Modernization Faces Oversight Concerns
Contract Overview
Contract Amount: $430,027,161 ($430.0M)
Contractor: Lockheed Martin Corporation
Awarding Agency: Department of Defense
Start Date: 2006-12-14
End Date: 2019-01-31
Contract Duration: 4,431 days
Daily Burn Rate: $97.0K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: UCA-PAKISTAN MODERNIZATION MID LIFE UPGRADE (MLU) FOR PEACE TBD
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76108
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $430.0 million to LOCKHEED MARTIN CORPORATION for work described as: UCA-PAKISTAN MODERNIZATION MID LIFE UPGRADE (MLU) FOR PEACE TBD Key points: 1. Significant contract value of over $430 million awarded to a single large corporation. 2. Limited competition due to 'NOT AVAILABLE FOR COMPETITION' status raises price discovery questions. 3. Long contract duration (4431 days) and firm-fixed-price structure may limit flexibility and incentivize cost overruns. 4. Aircraft Manufacturing sector is critical but often involves complex, high-cost procurements. 5. Lack of small business participation noted.
Value Assessment
Rating: questionable
The contract's value of $430M for aircraft modernization is substantial. Without clear benchmarks or competitive pricing data, assessing its value for money is difficult. The firm-fixed-price structure, while offering cost certainty, can lead to inflated prices if competition is absent.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a sole-source or limited source award. This significantly restricts price discovery and negotiation leverage for the government, potentially leading to higher costs than a competitive process would yield.
Taxpayer Impact: The lack of competition and potential for inflated pricing directly impacts taxpayer dollars, as a significant sum is committed without the benefit of market forces driving efficiency.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The long duration of the contract could lead to outdated technology or increased maintenance costs. Lack of transparency in the procurement process hinders public trust. Potential for cost overruns exists despite the firm-fixed-price structure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Limited Oversight Potential
- Long Contract Duration
- No Small Business Participation
Positive Signals
- Firm Fixed Price Contract Type
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a high-value and technologically complex industry. Spending in this sector is often characterized by long lead times, significant R&D investment, and a limited number of qualified contractors, making competitive procurement challenging.
Small Business Impact
The data indicates no small business participation in this contract. This is a missed opportunity to foster small business growth within the defense industrial base and could suggest a procurement strategy that favors large, established corporations.
Oversight & Accountability
The 'NOT AVAILABLE FOR COMPETITION' status raises immediate oversight flags. Robust justification for the lack of competition is essential. The long duration also necessitates continuous monitoring to ensure performance and cost adherence.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- Long contract duration increases risk of obsolescence and cost overruns.
- Absence of small business participation.
- Potential for inadequate oversight due to sole-source nature.
- Limited transparency in the procurement process.
Tags
aircraft-manufacturing, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $430.0 million to LOCKHEED MARTIN CORPORATION. UCA-PAKISTAN MODERNIZATION MID LIFE UPGRADE (MLU) FOR PEACE TBD
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $430.0 million.
What is the period of performance?
Start: 2006-12-14. End: 2019-01-31.
What was the justification for not making this contract available for competition, and were alternative competitive strategies considered?
The justification for the limited competition is crucial for assessing value. Without competitive bids, the government lacks a market-based price comparison. Exploring options like phased competitions or set-asides for specific components could have potentially increased competition and ensured better pricing for taxpayers.
How will the Department of Defense ensure cost control and prevent scope creep over the 4431-day contract duration?
Given the extensive duration, robust contract management and oversight are paramount. This includes regular performance reviews, strict change control processes, and independent cost analysis. The firm-fixed-price nature requires diligent monitoring to ensure the contractor remains within the agreed-upon price without compromising quality or scope.
What is the projected return on investment or operational benefit derived from this modernization program to justify the $430M expenditure?
The strategic value and expected operational improvements from the UCA-PAKISTAN modernization are key to justifying the significant investment. Quantifiable benefits, such as enhanced mission capabilities, extended aircraft lifespan, or improved safety, should be clearly defined and tracked to demonstrate the program's effectiveness and return on taxpayer funds.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp (UEI: 834951691)
Address: LOCKHEED BLVD, FORT WORTH, TX, 76108
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $430,027,161
Exercised Options: $430,027,161
Current Obligation: $430,027,161
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-12-14
Current End Date: 2019-01-31
Potential End Date: 2019-01-31 00:00:00
Last Modified: 2021-12-07
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